- XRP price action develops two consecutive daily candles inside the bar.
- A rare and powerful bullish reversal pattern is developing, confirmation is still needed.
- Downside risks persist, but are likely limited.
The price of XRP could return to a leading position in the altcoin market if it can achieve confirmation of one of the most powerful and rare candlestick patterns out there – the Squeeze Alert.
XRP Price Positioning for Monster Bear Trap and Short Squeeze
XRP price has a very positive number of bullish confluence levels on its daily chart. Between the candlestick chart and its oscillators, XRP could come as a big surprise and start a significant rally. XRP will first need to complete and confirm the bullish Squeeze Alert pattern to perform a move that could start a new bull market.
The Squeeze Alert (bullish) is a three-session reversal indicator that forecasts a reversal and a new uptrend. It is a rare pattern and is one of the most compelling bullish reversal indicators in candlestick analysis. The probability of a bullish reversal from this pattern is exacerbated if the Squeeze Alert develops near a support level.
- The first session is black (traditional bearish candlestick color, contemporary is red).
- The second session can be white (green) or black (red).
- The high of the second session is below the high of the first session.
- The low of the second session is above the low of the first session.
- The third session can also be white (green) or black (red).
- The high of the third session is below the high of the second session.
- The low of the third session is above the low of the second session.
However, while the current structure shows that the compression alert is almost complete, confirmation can only occur if an undeniable bullish daily candle develops within two to three periods after the third session. For example, a bullish engulfing candle or a bullish Marubozu would definitely confirm the bullish compression alert.
Contributing to the probability of a bullish reversal for XRP price, the composite index forms support and pushes up toward a cross above its fast-moving average. At the same time, the% B oscillator is about to re-cross above the 0.2 level, giving a strong signal that the recent move lower is likely a massive bear trap.
XRP / USD Ichimoku Daily Chart
Buyers should wait for an easy move to sustain resistance at $ 0.90, where the Kijun-Sen, the 38.2% Fibonacci retracement, and the bottom of the cloud (Senkou Span A) currently exist. Above that, the next big hurdle is the critical and vital $ 1.00 level. Ultimately, the bulls will need to close and stay above the $ 1.00 level to chase any new major uptrends.
The prospect of a bullish reversal will be invalidated if sellers push XRP to a close below the 50% Fibonacci retracement at $ 0.68. In that scenario, the XRP price will likely drop to $ 0.55 and even deeper to a major support zone near the $ 0.36 value area.